Osaka, Japan-based Takeda was ordered to pay $6 billion by the jury yesterday in Lafayette, Louisiana. Its shares fell 5.2 percent to close at 4,572 yen in Tokyo, the biggest decline since Dec. 27. Indianapolis-based Eli Lilly, Takeda’s partner, was ordered to pay $3 billion, though Takeda may wind up paying any final judgment in the case under an agreement between the companies. Lilly dropped 2.2 percent to the equivalent of $57.32 in German trading. It fell 32 cents to $58.30 in New York Stock Market composite trading at 9:48 a.m.

“I hope Takeda executives in Japan heard what this jury had to say loudly and clearly,” Mark Lanier, a lawyer for former Actos user Terrence Allen, said after the verdict. The jury earlier awarded $1.5 million in compensatory damages to Allen, who blamed the drug for his bladder cancer.

Takeda, Asia’s largest drugmaker, faced the Actos claims after it scrapped development of another diabetes drug this year when research linked it to liver damage. More than 2,700 Actos suits have been consolidated before U.S. District Judge Rebecca Doherty in Louisiana for pretrial information exchanges, according to court dockets. Doherty presided over Allen’s trial.

Cut Likely

The $9 billion jury award, the seventh-largest in U.S. history based on data compiled by Bloomberg, will probably be reduced because the U.S. Supreme Court has said punitive verdicts, imposed for bad conduct, must be proportional to the awards of compensatory, or actual, damages that underlie them. The court has said that in limited cases, punitive awards that amount to ten times a compensatory award would be acceptable.

Of the 10 largest U.S. punitive verdicts previously awarded against corporations, all were either reversed or substantially reduced, according to data compiled by Bloomberg. None were paid at the amounts assessed by the juries.

“The judgment is so out of line with actual damages that it shows a runaway jury, not a verdict that is likely to stand, even if an appeals court believes Takeda and Lilly wrongfully hid the risk of cancer,” Erik Gordon, professor at the University of Michigan’s School of Law and Ross School of Business, said in an e-mail.

Companies’ Appeal

Takeda and Lilly officials said they’d appeal the jury verdict, which may be the largest single award in U.S. history over a drugmaker’s mishandling of a product.

“Takeda respectfully disagrees with the verdict and we intend to vigorously challenge this outcome through all available legal means, including possible post-trial motions and an appeal,” Kenneth Greisman, general counsel for Takeda’s U.S. unit, said in an e-mailed statement. “We also believe we demonstrated that Takeda acted responsibly with regard to Actos,” he added.

Candace Johnson, a spokeswoman for Eli Lilly, said in an e-mail that the company is confident Actos is an important option for the treatment of type 2 diabetes.

“While we have empathy for the plaintiff, we believe the evidence did not support claims that Actos caused his bladder cancer,” Johnson said. “We intend to vigorously challenge this outcome through all available legal means, including possible post-trial motions and an appeal.”

Market Overreaction

Atsushi Seki, an equities analyst at Barclays in Tokyo, said in an interview today that any efforts to reduce the verdict should be watched carefully. The market is taking about 40 percent to 50 percent of the payment into account today in connection with Takeda’s shares and that’s an overreaction, Seki said.

Lilly’s shares also shouldn’t be down, said Mark Schoenebaum, an analyst with ISI Group LLC. “LLY is down today (and underperforming) on fears that it will owe billions of dollars in payments due to a lost court case,” he said in a note to clients. He said that Lilly’s indemnity agreement with Takeda should eliminate any exposure to the massive verdict.

Allen sued both Takeda and Eli Lilly over Actos. Lilly served as Takeda’s U.S. partner in selling and marketing the drug over a seven-year period starting in 1999. While that partnership ended in 2006, Lilly continued to have rights to sell Actos in parts of Asia and Europe, as well as in Canada and Mexico.

High Fives

After the verdict, Lanier exchanged celebratory high-fives with members of his legal team outside the courtroom. He said evidence presented in the trial showed Takeda agreed to indemnify Lilly for any legal liability tied to Actos. That means that Takeda will probably be on the hook alone for whatever the final amount turns out to be.

Bruce Parker, a lawyer who represented both Eli Lilly and Takeda in the two-month trial, declined to comment as he was leaving the courtroom.

The Louisiana jury is the fourth panel to have weighed allegations that Takeda marketed Actos knowing it could cause cancer and failed to properly warn doctors and consumers about the risks.